For several days since Binance US announced the resumption of withdrawals, bitcoin (BTC) has changed hands at a discount and was trading at more than $2,500 below the prevailing market price on July 10. The emergence of a discount on crypto assets paired with USD on Binance US has fueled speculation about the affiliate’s future and the fate of users’ funds.
Stablecoin Asset Pairs Tracking the True Value of Crypto Assets
On July 10 the BTC/USD value on the beleaguered crypto exchange Binance US stood at just over $27,500, about $2,500 below the price prevailing on other centralized exchanges. In contrast, when paired with the stablecoin USDT, the top cryptocurrency’s value of just over $30,100 on Binance’s affiliate in the U.S. was consistent with that on other exchanges.
In fact, as shown by data on Binance US, most crypto assets listed on the platform have also been trading at a discount in USD terms. Yet, when paired with the stablecoins USDT and USDC, many of the crypto assets appeared to track their true values. While news of BTC and other crypto assets’ discounts was one of the most trending topics on Twitter on July 9, recent data on the trading platform indicates that these price discrepancies initially emerged around June 21.
The emergence of a discount on all assets paired with USD is seemingly the direct opposite of what happened when the U.S. Securities and Exchange Commission sought to freeze user assets via a court motion. As reported by Bitcoin.com News in early June, the BTC/USD value on Binance US was $1,444 higher per bitcoin than the average global exchange rate. Ethereum was also trading at a premium of $100.
The Existence of Arbitrage May Indicate Deeper Problems
In the meantime, the emergence of a discount on all crypto assets paired with the USD appears to be linked to the crypto exchange’s banking partner challenges. In its message to users on June 23, Binance US said it expected its banking partners to discontinue the USD withdrawal service. At the time, the affiliate encouraged “users to use, withdraw, or convert their USD fiat balances to stablecoins to continue crypto-to-crypto trading on the platform.”
$BTC is trading $3000 lower on Binance US & $ETH is trading $200 lower. I don’t think this is an arbitrage opportunity. It’s too obvious and it smells like something is seriously wrong. Again, this is Binance US. Just US version. Don’t freak out yet. pic.twitter.com/6WS9y6bMjD
— Max (@MaxBecauseBTC) July 8, 2023
On Twitter, the emergence of a discount on crypto assets paired with the USD has on one hand fueled speculation about the affiliate’s future and the fate of users’ funds. On the other hand, users have questioned the apparent discount on nearly all assets paired with the USD. For example, a user by the name of Max said the price discrepancies on Binance US may not be an indication of an arbitrage opportunity. Another user named James Foura characterized the supposed arbitrage opportunity as one-way trade.
“People keep talking arbitrage on Binance US … it’s a one-trip trade folks. Getting money back in requires crypto that has to be bought at higher prices elsewhere. So it’s basically a wash unless you want to dump your crypto. Can anyone find parity on Coinbase,” Foura said in a tweet.
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